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When an Internet “Tax” Is Not a Tax


AOL is being blasted for announcing a new plan which involves charging marketers to ensure their emails reach their intended recipients.

"Two-tiered Internet!" some have cried. AOL is being accused of levying a "tax" on the Internet, despite the fact that the service is entirely voluntary and that only governments can tax.

Let's calm down a bit and gain some perspective. What AOL is trying to do is rollout a new service, a new feature, that will benefit both senders and receivers of "bulk" email.

AOL's offer to emailers (like IPI) is that if we are willing to pay a small fee, AOL will ensure that this “certified” email passes through whatever spam filters and other technologies are being used to fight spam, pfishing and other scams.

We think this is a good idea, and we think it’s about time. While it’s true that if this effort succeeds it will cause email marketing campaign costs to rise, we think that’s a good thing, too. The reason spam is such a problem today is that there is almost no cost to spamming. There’s nothing at all wrong with a system designed to give marketers, at their discretion, priority handling of their marketing materials.

More importantly, we need to remember that these are just the early days of the Internet. The Net is going to continue to morph and develop into a provider and carrier of increasingly compelling content and services. And that’s also a good thing.

But for the Internet to continue to develop, for companies to roll out new content and services, companies must be permitted to try new business models.

Companies might, for instance, promise to carry any VoIP service, but might offer you increased sound quality or enhanced features if you sign up to use "their" VoIP product. They might make a superior quality search engine available to their customers, but only if the customers sign up for a certain bundle of services or an enhanced quality of service. There’s nothing wrong with any of this. They are business decisions, and private contractual agreements between providers, content owners and end-users.

The great danger here is government intervention that would restrict the rights of Internet service providers and broadband providers to try new business models and enter into contracts with both users of their services and content providers.

Such restrictions would needlessly slow the rollout of these new products and services.

Now, AOL's experiment may fail. Those who send large quantities of email to AOL subscribers may decide that the service isn't worth it, or they may find that it doesn't work. Alternatively, they might start neglecting AOL's users and concentrate their communications efforts on non-AOL subscribers, which might lead to an exodus of users from AOL. Who knows? The point is, companies must be free to experiment, to succeed or to fail, to try to come up with new products and services that their customers want.

And government should not stand in the way.